What We Will Cover in this Annuity Review
In this annuity review, we will be going over the details regarding the National Western Life NWL fixed indexed annuity with Income Outlook Plus 5 Rider, such as:
- Product type
- Current rates
- Realistic long-term return expectations
- How it is best used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you’ve been considering the purchase of an annuity because you want your money to grow tax-deferred, and you want to ensure that you have an income for life, then the National Western Life NWL Ultra Future Fixed Indexed Annuity with the Income Outlook Plus 5 Rider could be a good product for you.
However, that being said, before you make a long-term commitment to this, or any other, annuity, it is important that you have a good idea regarding how the product works, and how it could work for you. Otherwise, if you find that the annuity is not all it was initially cracked up to be, it could be difficult and costly to get out of it.
Over the past few years, fixed indexed annuities have become quite popular – particularly with those who are seeking higher returns than what a regular fixed annuity can give, yet also want principal protection for their hard-earned savings. Fixed indexed annuities can provide all of this – as well as a lifetime income in retirement.
Yet, because these annuities have become so in-demand, there are many insurance carriers that have started to increase their product lines with “new and improved” annuities that provide a long list of bells and whistles. And although it can be nice to have all of the options available, this has also made an already confusing product – annuities – even more so.
In addition, just like when you’re purchasing a new vehicle, many of these new features will come at an added cost. Likewise, they can also require you to carefully read over the owner’s manual in order to know how to use them!
Although this isn’t necessarily a bad thing to have these choices, it does make it all that much more imperative that you truly understand what you’re getting with your retirement savings. Oftentimes, it can be helpful to have a guide who is well versed in the product already who can help you to sort out all of the “fine print.” That’s where we come in.
Annuity and Retirement Income Planning Information You Can Trust
If you’ve never visited our website before, then we would like to officially welcome you here to AnnuityGator.com. We make up a team of annuity professionals who are focused on offering unbiased, yet very in-depth, annuity reviews. We have been at this for quite some time now – much longer than our competitors – and because of that, we have become a highly trusted source of annuity information.
If you have been in the market for an annuity, and you’ve been looking for information via the Internet, it’s likely that you’ve come across some highly conflicting details about annuities. This isn’t all that surprising, though, as there are a lot of annuities available in the market today, and there are many opinions, both positive and negative, about them.
It is also possible that you have, in the recent past, attended an annuity seminar. There, the presenter may have gone over the details about the National Western Life NWL Ultra Future fixed indexed annuity, or some other similar product. Your attendance at this event may even have been the ultimate catalyst that has led you here to our website.
Although there are numerous good sites on the Internet that focus on bringing you information about annuities, you may have already noticed that some of them will work hard to “lure” you in by offering some pretty bold claims about the annuities they represent. For example, they may say that you can get some or all of the following benefits:
- Low Fees
- High Income Payouts
- 7 – 8% annual return
- Top-Rated Annuity Companies
But, while these claims might sound really good before you step forward and make a long-term buying decision with what could be a sizeable chunk of your retirement savings, you should first find out whether or not these claims really are true.
To do so, there are various pieces of product information available, and you will even find that there are some long pieces of material that you can wade through which include all of the pertinent product information. Yet, while the details you need are likely in there somewhere, going over these can be just about as exciting as enduring a root canal.
Here’s where we can help. If you truly want to learn more about the National Western Life NWL Ultra Future Fixed Indexed Annuity with Income Outlook Plus 5 Rider, then you are definitely in the right place on our website.
In fact, we dare say that this website is the only place online where you can find all of the in-depth details about this annuity – which includes the good, and the bad. That’s because we feel that knowing the whole story about an annuity is the only way for consumers to make a truly well-informed decision about whether or not it is the right product for them.
Oftentimes, when a financial or insurance advisor is presenting a fixed indexed annuity to his or her clients, they will provide a nice rosy picture of how the annuity can offer the best of all worlds, meaning that the product has the ability to offer a nice return, along with safety of principal – as well as income for life. But in doing so, the advisor may neglect to provide details about areas that could be considered drawbacks.
Given that, if you are seriously considering the purchase of the NWL Ultra Future fixed indexed annuity from National Western, then you will need to know just exactly what it is that you’re getting into, because getting out of this (or any other) annuity can be extremely expensive if you should happen to change your mind in the future.
In order to be completely clear here before we get started, we want to state for the record that we do feel that annuities can be a good financial product for many people – provided that they fit in well with the individual’s long and short-term financial objectives.
That being said, if you are ready to begin the annuity review, then let’s dive in!
National Western Life NWL Ultra Future Fixed Indexed Annuity with Income Outlook Plus 5 Rider at a Glance
|Product Name||NWL Ultra Future|
|Issuer||National Western Life|
|Type of Product||Fixed Indexed Annuity|
|S&P Rating||A (Strong)|
|Phone Number||(800) 922-9422|
Opening Thoughts About the National Western Life NWL Ultra Future Annuity
National Western Life Insurance Company offers high-quality insurance products with a focus on meeting the financial security needs of well-defined market segments. The company offers its insurance and annuity products in 49 of the U.S. states (including the District of Columbia, and four U.S. territories), as well as in Haiti, and other locations around the globe. National Western Life is headquartered in Austin, Texas.
In October 2015, National Western Life Insurance Company (NWL) became a wholly owned subsidiary of National Western Life Group. The company maintains strong financial ratings, including an A (Strong) from Standard & Poor’s, and an A (Excellent) from A.M. Best.
As of year-end 2016, National Western Life held nearly $11 billion in total assets and had just under $21 billion of life insurance in force. In 2016, the company brought in total revenues of $1.5 billion and paid out policy benefits of more than $980 million.
Throughout the past decade or so, the volatility in the market has made investors think twice about putting their hard earned savings into an area that could wipe away years of planning within a very short time if experiencing a correction. Yet at the same time, historically low-interest rates have not provided investors anywhere near the returns they need in order to beat – or even meet – future inflation. This is where the fixed indexed annuity can come in handy.
These financial vehicles allow you the opportunity to attain index-linked returns as well as the safety of principal, regardless of what occurs in the market. Just like other types of annuities, these products also offer tax-deferred earnings within the account – and, there is the option to receive lifetime income in retirement, regardless of how long you may need it.
However, even though this “best of all worlds” scenario initially seems very appealing, these benefits can also come at a cost. So, before you move forward with the purchase of an annuity, be sure that you check out all of the details as, once you have purchased an annuity, it could be quite an ordeal to get yourself out of it.
Before getting into the nitty-gritty details, here are some necessary legal disclosures…..
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. National Western Life has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners.
For additional information on how to compare fixed annuities so that you can decide which may be the best one for you, click here in order to obtain our free annuity report.
How National Western Life Describes the NWL Ultra Future Fixed Indexed Annuity
The National Western Ultra Future fixed indexed annuity is described by the company as being a flexible premium deferred equity indexed annuity. This annuity offers two indexed interest options, including an annual ratchet (with monthly point-to-point and cap), or an annual ratchet with monthly average (as well as a participation rate and asset fee rate).
The Ultra Future has a few interest rate crediting strategies, too, including:
Option A: Option A features an indexed interest rate that has an annual ratchet, with a monthly average strategy used for crediting. With this option, there is a guaranteed minimum participation rate of 50%, which means that, depending on what the underlying index returns in a given year, the return to the annuity’s account would be at least 50% of that return percentage. This annuity tracks the S&P 500 index.
(Annual ratchet refers to indexed interest earned being calculated from the beginning index value for each policy year – regardless of whether it is higher or lower than that of the previous year. And, while all indexed interest is credited annually on the policy anniversary and locked in, future decreases in the index will not reduce principal).
Option B: With option B, the annuity holder will receive a minimum guaranteed interest rate over time.
Option D: With this option, there is an indexed interest rate and an annual ratchet with a monthly cap. With a cap, the underlying index’s return will essentially be “capped”, or stopped, at a certain rate – regardless of how high the index may return in a given year. For example, if the cap is 4%, but the index returns 5%, the return that is credited to the account will be 4%. In the case of the NWL Ultra Future annuity, with this particular interest crediting option, there is a guaranteed monthly cap rate of 1%.
Regarding the monthly index cap rate, the interest rate here will be the sum of monthly percentage increases and decreases in the index – but the rate that is credited will not be less than 0%. Here, any single monthly increase will be limited to no greater than the monthly index cap rate, which is declared in advance annually.
Purchasers of this annuity can also receive a premium bonus of 9% in the first year, and 4.75% for years 2 through 5. As with other fixed indexed annuities, once credited, gains are guaranteed throughout the life of the annuity.
There are a few other bells and whistles on this annuity, like a death benefit. In this case, if the annuitant’s death occurs before the annuity date, a named beneficiary can receive either the annuity’s cash surrender value or a stream of income payments.
Also, by adding the Income Outlook Plus 5 rider, annuitants can enjoy the benefits of guaranteed lifetime retirement income with enhanced accumulation and control. That is because this rider offers growth potential for the annuity’s lifetime withdrawal payments, as well as control over when those payments begin. In addition, guaranteed withdrawal percentages increase at certain ages, while still allowing access to funds for additional withdrawals.
How Insurance and Financial Advisors May “Pitch” this Annuity
Being that the NWL Ultra Future is a fixed indexed annuity, there are several ways in which an insurance or financial advisor may go when they are pitching this product – or, rather than focusing on just one key benefit, they could roll them all into one.
For example, because it tracks an underlying market index, the Ultra Future annuity offers the opportunity to obtain a higher return than that of a regular fixed annuity – while at the same time, protecting principal from any market downturns. There is also the ability to have an ongoing income for life – which can definitely alleviate the worry about running out of income in retirement.
For those who opt to add the Income Outlook Plus 5 income rider, there are several guarantees that can be attained during the annuity’s accumulation period, including:
- 4% interest on the accumulation period withdrawal payment base until the lifetime withdrawal payments begin
- 5% rider bonus on the premiums received in the first policy year
- An increase every five years (until age 90 or payments begin) of the guaranteed withdrawal percentages
- Access to the annuity’s account value
- The option of restarting the ten-year accumulation period at the end of the fifth policy year
This rider also offers some nice guarantees during the annuity’s withdrawal period, such as:
- Withdrawal payments that can be paid for life
- The ability to stop and start withdrawal payments
- No withdrawal charges on withdrawal payments
- A withdrawal payment base to step-up to the annuity’s account value if larger, when the withdrawal period begins, and each policy anniversary thereafter
- The maximum guaranteed annual withdrawal payment increases each time there is a step-up in the withdrawal payment base
- Access to the annuity’s account value remains
But even with the features of the annuity and the rider, it is also important to keep in mind that there are often tradeoffs necessary in order to get the added benefits. For starters, there is an annual charge for the rider, which is due each year on the policy anniversary, starting with the first.
As far as the annuity itself, there are several items to keep in mind that you’ll find in the back of the brochure – but that an insurance agent or financial advisor may or may not point out in any great detail.
For example, the renewal monthly cap rate could be as low as 1%. Also, the participation rate will likely be higher during the first policy year than in subsequent policy years – and may be as low as 50%. Likewise, asset fee rates will likely be lower during the first policy year than in subsequent policy years – and could be as high as 6%.
What About Any Fees on the National Western Life NWL Ultra Future Annuity?
When considering any fees on the National Western Life NWL Ultra Future fixed indexed annuity, there are several. First, withdrawal charges could be deducted from your account value – so as you take income payments, your account could be reduced even further than that amount.
If you have opted for the Income Outlook Plus 5 rider, there is also an annual charge for this. And, if at the end of the annuity’s accumulation period you have not yet requested withdrawal payments or elected the restart option, the annual rider charge will still continue to be deducted from the account value.
Also, even though most annuities will have some type of surrender charge if you withdraw more than 10% of the contract value within the first several years (and after the first full policy year), the Ultra Future product has an extraordinarily high and long enforcement of these fees. In fact, surrender charges could last for 15 full years!
|Policy Year||Surrender Charge %|
The Annuity Gator’s End Take on the National Western Ultra Future Fixed Indexed Annuity
Where it works the best:
This annuity may work the best if you are looking for:
- Safety of your principal – regardless of what occurs in the market
- The opportunity for index-linked growth
- Guaranteed lifetime income in the future
Where it works the worst:
Alternatively, this particular annuity may not be an ideal fit for you if you:
- Want penalty-free access to most or all of your money within the first several years of purchasing the annuity
- Do not intend to use the lifetime income feature on the annuity
In order to truly get an idea of whether or not a fixed indexed annuity such as the National Western Life NWL Ultra Future fixed indexed annuity is right for you, click here so that you can access our free annuity buyer’s report.
There are many different criteria that you should consider prior to making a long-term commitment to purchasing an annuity. For example, in addition to knowing that it can be fairly expensive to change your mind, you should also consider why you may be choosing one specific fixed indexed annuity over a long list of other products that may also suit your particular financial needs.
If you are still leaning towards the NWL Ultra Future annuity product from National Western Life Insurance Company, then you can be sure that the principal you have in the annuity will be safe – no matter what occurs in the market. You can also we well assured that you’ll have an income that you can count on in retirement – for as long as you live.
But even with all of these great features, the reality is that the National Western Life NWL Ultra Future fixed indexed annuity from National Western Life could still fall somewhat short. And because of that, there may be other, better alternatives out there for you.
In any case, the only way to really know if this annuity is right for you is to have it tested. We can assist you with that by running it through our annuity calculator, using your particular financial figures. If this is something that would be of interest to you, then please contact us.
Have Any More Questions? Did You Happen to Notice Any Mistakes in this Annuity Review?
We realize that this annuity review went a bit on the long side. So for that, we truly appreciate you sticking with us thus far. But, even though it may take a bit longer to read through, we feel that “erring” on the side of giving too much information, as versus not enough, is much more beneficial to our readers. Therefore, if you felt that this annuity review was helpful, then, by all means, please feel free to pass it along and to share it with anyone else that you think might also benefit from it, too.
Also, we know that the vast amount of information that is available about annuities can, and oftentimes does, change. So, if you happened to notice any of the details within this review that should be revised, please let us know that too, and we will be glad to make the necessary updates to it.
Are there any other annuities you would like to know more about?
If so, just let us know the name (or names) of the annuity(ies) and our AnnuityGator.com annuity “geeks” will get on it. So, be sure to check back soon and regularly to see all of our new and updated annuity reviews.
The Annuity Gator